Sources say Exclusive-Microsoft faces EU antitrust investigation over insufficient remedies

Author: Foo Yun Chee

BRUSSELS (Reuters) – Microsoft will likely face an EU antitrust investigation in the coming months after remedial talks with the EU watchdog aimed at preventing such a move appear to have hit a snag, people familiar with the matter said.

Microsoft, which was fined 2.2 billion euros ($2.4 billion) in the previous decade for practices violating EU competition rules, including tying or bundling two or more products, has found itself in the EU’s crosshairs following a complaint filed by space Salesforce-owned messaging app Slack in 2020.

Microsoft added Teams to Office 365 for free in 2017, and the app eventually replaced Skype for Business.

Slack alleged that its rival fraudulently integrated the workplace chat and video app Teams with its Office product. The company did not respond to a request for comment on Monday.

Microsoft began talks with the European Commission last year in a bid to head off an investigation. It recently proposed a price cut for its Office product without Teams.

The European Commission, which hopes the price difference between Office with Teams and Office without the app will create a level playing field for competitors and give consumers more choice, is demanding a deeper price cut than that offered by US software giant People said.

The EU representative declined to comment.

A Microsoft spokesman said: “We continue to cooperate with the Commission in its investigation and remain open to pragmatic solutions that address its concerns and serve customers well.”

A company that faces fines of up to 10% of its global turnover if it is ultimately found in breach of EU antitrust rules could still improve its remedies before the regulator launches an investigation.

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(Reporting by Foo Yun Chee, additional reporting by Akash Sriram in Bengaluru; editing by Mark Potter, David Evans and Sonali Paul)